Investment researcher at Longview Asset Management and ex-WSJ reporter and editor. Writer of flash fiction. Authored “The Domain Game.”
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Articles by David Kesmodel
FDA Set to Move on Caffeine in Alcoholic Drinks
U.S. regulators are poised to ban the sale of caffeine-containing alcoholic drinks amid rising safety concerns, in a blow to several small but fast-growing drinks companies. Four Loko, Joose and other fruit-flavored, alcoholic beverages will no longer be able to contain caffeine under a series of regulatory actions expected from the Food and Drug Administration and other agencies this week, according to U.S. Sen. Charles E. Schumer (D., N.Y.) and people familiar with the matter.
Some Surprised by Obama's Choice for U.K. Ambassador
CHICAGO -- President Barack Obama has raised some eyebrows with his decision to send as ambassador to the U.K. a little-known retired investment banker -- and top fund-raiser -- from his hometown who has little diplomatic experience. The post at the Court of St. James's in London is one of the most prestigious in U.S. diplomatic circles.
Economy Beers Give Brewers Lift in Downturn
Mark Lehr's favorite beer is Heineken, but one recent afternoon, the Chicagoan emerged from a 7-Eleven with a 12-pack of Busch that cost him $8 -- about $7 less than a dozen Heinekens. "My funds are limited right now," said the 39-year-old house painter, noting that he has had far fewer customers during the recession.
Roll-Your-Own Cigarette Machines Help Evade Steep Tax
WOOD DALE, Ill.—Scores of tobacco retailers in the U.S. are taking advantage of a federal tax loophole to offer deep discounts on roll-your-own cigarettes. But the practice is attracting scrutiny from regulators and cigarette manufacturers. At Smoke Zone, a store in this Chicago suburb, customers one recent afternoon flocked to two high-speed rolling machines that produce a carton of cigarettes in eight minutes. The price: $21—less than half the cost of a carton of Marlboro cigarettes.
Farm Boom Sows Jobs Bounty
Iowa State University student Andrew Filipi faced a quandary recently that many college seniors today can only dream of: choosing between two job offers six months before graduation. With a double major in animal science and international agriculture, Mr. Filipi is part of a wave of students at U.S. colleges of agriculture who are in high demand amid an expanding and increasingly global farm economy.
Shuanghui to Boost Smithfield Exports as First Priority
Shuanghui International Holdings Ltd. intends to quickly ramp up pork exports from the U.S. as its top priority after Thursday's closing of its $4.7 billion acquisition of Smithfield Foods Inc., senior executives said. Shuanghui and Smithfield—whose tie-up marks the largest Chinese takeover of a U.S. company—already have begun integrating their international sales staffs.
Sowing a New Crop of Farmers
Andy Bose wanted to expand his nascent Nebraska farm operation a few years ago but couldn’t find land he could afford. The problem: more-established farmers could offer bigger rent checks to landowners. Mr. Bose, 35 years old, found a solution in a U.S. Department of Agriculture program that provides financial incentives to older landowners to rent to neophytes more cheaply.
Wine Advocate Writers Spark Ethics Debate
For decades, wine critic Robert M. Parker Jr. has championed a rigid system of ethics, paying for all of his travels to wineries and shunning gifts from the trade. "It is imperative for a wine critic to pay his own way," Mr. Parker wrote in his latest book, published last fall. But Mr. Parker, it recently has been discovered, hasn't held some fellow writers at his influential newsletter, Robert Parker's Wine Advocate, to the same standard. ...
Anheuser Explores Sale of Struggling Rolling Rock
Brewing giant Anheuser-Busch InBev BUD -0.07% NV is exploring the sale of its storied but struggling Rolling Rock brand, according to people familiar with the matter. The potential sale comes three years after Anheuser-Busch Cos. bought Rolling Rock from Belgian brewer InBev NV for $82 million. Visitors look over a display case of beers made by the Anheuser-Busch InBev in St. Louis, Missouri. Visitors look over a display case of beers made by the Anheuser-Busch InBev in St. Louis, Missouri.
Smithfield Merger Began 7 Years Ago, Chairman Says
It was a brief meeting of the two most powerful people in pork. The encounter between Joseph W. Luter III, chairman of Smithfield Foods Inc., the world's largest pork processor, and Wan Long, chairman of Shuanghui International Holdings Ltd., known as "China's No. 1 Butcher," lasted only 90 minutes about seven years ago. Hosting Mr. Wan in his Manhattan apartment, Mr. Luter floated the idea of a joint venture, saying...
Anheuser Uses Facebook for Super Bowl Ad Buzz
Super Bowl advertiser Anheuser-Busch Inc. is revealing snippets of its upcoming commercials to Facebook Inc. fans of Bud Light, in a new twist on its efforts to create buzz ahead of the big game. The U.S. unit of Anheuser-Busch InBev NV is the latest of many companies to leverage the popularity of the social-networking site to target consumers. The move comes as the world's largest brewer by revenue grapples with a slump in demand for...
Anheuser CEO Fights for His Legacy
ST. LOUIS -- For years, August A. Busch IV coveted the throne at Anheuser-Busch Cos. and the chance to finally prove himself to his exacting father. Now, just 18 months into his tenure as CEO, a potential takeover is complicating the younger Mr. Busch's plans.
Tyson to Divest Sow-Purchasing Business to Clear Hillshire Deal
Tyson Foods Inc. agreed to sell a small hog-purchasing division to resolve antitrust concerns by the U.S. Department of Justice over its planned $7.7 billion acquisition of Hillshire Brands Co. Under the settlement, Tyson will sell Heinold Hog Markets, a unit that purchases and resells sows, or female breeding hogs, to sausage makers. The division accounted for less than 1% of Tyson's roughly $34 billion in revenue last year, making...
Energy Prices Steer Farmers Away From Manure Power
Wisconsin dairy farmer Art Thelen was full of optimism a decade ago when he joined a growing group of U.S. farmers investing in technology that turns livestock manure into electricity. The systems promised to curb air pollution from agriculture, generate extra revenue and—in no small feat—curtail odors that waft for miles in much of farm...
Nestlé to Shift to Cage-Free Eggs in U.S. by 2020
Nestlé SA pledged Tuesday to purchase only cage-free eggs for its U.S. food products by 2020, making it the largest packaged-food company to commit to such a switch and advancing a broader industry push toward more-humane animal-welfare policies. Nestlé, the world’s largest food maker by sales, unveiled a more-aggressive timeline than several rivals that recently said they would move to cage-free eggs, including General Mills Inc....
California’s Growers Bear Brunt of Drought Woes
California’s historic drought is forcing farmers in the dominant produce-growing state to fallow hundreds of thousands of acres and spend millions of dollars to access water. Yet U.S. grocery shoppers are barely feeling an impact. Average retail prices for fresh fruits are down 3% so far this year and vegetables are up 1%, according to federal data. That compares with a nearly 2% gain in overall U.S. food prices. The lack of...
Hormel Names New Operations Chief, President
Hormel Foods Corp. elevated James Snee to president and chief operating officer, positioning him as the likely successor to Chief Executive Jeffrey Ettinger at the maker of Spam canned pork and Skippy peanut butter. Mr. Snee, who recently has run Hormel’s international division and served as a group vice president, will take over as president from Mr. Ettinger on Oct. 26. Mr. Ettinger, 57 years old, has held that post since 2004 and...
Several U.S. Industries Applaud Trans-Pacific Partnership
U.S. industries as diverse as aerospace, agriculture and apparel lauded the historic trade deal struck Monday, though others including pharmaceuticals makers said the deal failed to provide desired protections for intellectual property and other areas. The Trans-Pacific Partnership between the U.S., Japan and 10 countries around the Pacific lowers trade barriers for goods and services from poultry to building materials and sets commercial rules for two-fifths of the global economy.
Boeing CFO James Bell to Retire
CHICAGO—Boeing Co. Chief Financial Officer James Bell, who helped steer the aerospace company through several turbulent periods, plans to retire in April. The 63-year-old Mr. Bell, the highest-ranking African-American employee in the plane-maker's history, will be replaced by Greg Smith, 45, Boeing's corporate controller. Mr. Bell, who has served as CFO since 2003, is stepping down after the Chicago-based company reached...
Beef’s Meaty Profits Slow Effort to Boost Antibiotic-Free Production
Oregon cattleman Gary Bailey says business at his ranch has thrived in recent years thanks to growing consumer hunger for meat produced without antibiotics. But the 36-year-old has struggled in another role: recruiting fellow ranchers to leave the conventional beef market and join his rancher cooperative, Country Natural Beef, a supplier to Whole Foods Market Inc. Many of those conventional ranchers are already earning some of their...
Farmland Investments Take Root
Farmland is attracting growing interest from pension plans, hedge funds and even mom-and-pop investors as they seek to diversify assets and capitalize on an agriculture-industry slump that has pushed down land prices in some regions. Financial-services giant TIAA-CREF announced Tuesday that it has raised $3 billion for its second global farmland-investment partnership, exceeding its initial target of $2.5 billion.
California Water Usage Posts Big Drop
SAN FRANCISCO—The announcement of mandatory water cuts appear to be having an impact in California. The average reduction in urban areas climbed to 13.5% in April from 3.9% in March—though it still fell short of a statewide target of 25% amid the state’s ongoing drought. The percentage declines announced Tuesday are from the base year of 2013, before a first wave of emergency regulations were put in place. It comes after Gov.
Hormel to buy organic meat maker Applegate for $775 million
Hormel Foods Corp. agreed to buy Applegate Farms LLC for about $775 million, a move that would give the maker of Spam a foothold in the organic-meats category. Closely held Applegate’s annual sales are expected to be about $340 million this year, Hormel HRL, -0.54% said in a news release Tuesday announcing the deal. A deal would follow other transactions over the past year involving protein companies. In 2014, Tyson Foods Inc.
Hormel to Buy Organic Meat Maker for $775 million
Hormel Foods Corp. agreed to buy Applegate Farms LLC for about $775 million, a move that would give the maker of Spam a foothold in the organic-meats category. Closely held Applegate’s annual sales are expected to be about $340 million, Hormel said in a news release Tuesday announcing the deal. A deal would come on the heels of a year in which there several sales of protein companies. Last year, Tyson Foods Inc. paid $7.7...
Blue Bell Will Lay off 1,450 Employees
Ice-cream maker Blue Bell Creameries LP said it would lay off 37% of its 3,900 employees as it works to recover from a sweeping recall of all its products last month because of a listeria outbreak. The Texas company said on Friday it will lay off 750 full-time and 700 part-time employees, and put another 1,400 on partially paid furlough. Blue Bell also is taking other cost-cutting measures, including salary reductions for remaining...
Blue Bell will lay off 1,450 employees
Ice-cream maker Blue Bell Creameries LP said it would lay off 37% of its 3,900 employees as it works to recover from a sweeping recall of all its products last month because of a listeria outbreak. The Texas company said on Friday it will lay off 750 full-time and 700 part-time employees, and put another 1,400 on partially paid furlough. Blue Bell also is taking other cost-cutting measures, including salary reductions for remaining staff.
Craft Beer Makers Object to Ontario Retail System
TORONTO—Small brewers in Ontario are pushing for changes to one of the world's more unusual beer-selling environments. About 80% of retail beer sales in Ontario occur in a chain of stores that's jointly owned by Canada's three largest brewers: Anheuser-Busch InBev BUD -0.31 % NV, Molson Coors Brewing Co. TAP 0.05 % and Sapporo Holdings Ltd. 2501 1.41 % Between them, those brewing giants account for about 88% of Canada's beer sales.
Meet the Father of Zero-Based Budgeting
Five decades ago, a young Texas Instruments Inc. accounting manager named Pete Pyhrr pioneered a technique to help businesses shave costs. It led to a book deal, a People magazine interview and some consulting gigs, including as an adviser to then-Georgia Gov. Jimmy Carter. Then things mostly turned quiet for Mr. Pyhrr and his arcane tool, known as zero-based budgeting, until the Brazilians behind private-equity firm 3G Capital...
Expect 3G to aggressively cut costs at Kraft, as it has at Heinz
A key ingredient in 3G Capital Partners LP’s recipe for reshaping the U.S. food industry — reflected in its roughly $49 billion deal to acquire Kraft Foods Group Inc. — is an arcane-sounding financial tool that slashes costs by focusing on details as minute as how to make photocopies. On Wednesday, 3G confirmed plans for its H.J. Heinz Co. unit, which it bought two years ago, to buy the maker of Kraft cheese products and Oscar Mayer deli meats.
Kraft-Heinz Deal Shows Brazilian Buyout Firm’s Cost-Cutting Recipe
A key ingredient in 3G Capital Partners LP’s recipe for reshaping the U.S. food industry—reflected in its roughly $49 billion deal to acquire Kraft Foods Group Inc.—is an arcane-sounding financial tool that slashes costs by focusing on details as minute as how to make photocopies. On Wednesday, 3G confirmed plans for its H.J. Heinz Co. unit, which it bought two years ago, to buy the maker of Kraft cheese products and Oscar Mayer deli meats.
Why Starbucks Takes On Social Issues
Howard Schultz, one of the most successful entrepreneurs of his time, has become one of its most prominent social activists, too. As the events of the past week have shown, the two roles don’t always mix comfortably. A social media-fueled backlash against the Starbucks Corp. chief executive’s campaign to foster conversations about race relations in America is sparking questions about the wisdom of his initiatives and a broader...
Cage-Free Hens Study Finds Little Difference in Egg Quality
Egg-laying hens raised cage-free exhibit a wider range of natural behaviors than more-confined birds, but cage-free facilities have higher hen-mortality rates and lower air quality, according to food-industry-backed research published Wednesday. Cage-free hens can perch, nest and forage more than chickens reared in the two other major U.S. commercial hen-housing systems, both of which use cages, the study found. Birds occupying large...
Free-Range? Cage-Free? A Consumer’s Guide to Egg Terminology
Claims on egg packaging have grown so complicated that even the most-discerning shoppers are sometimes befuddled. There is the broad category "organic," but also "cage free," "pasture-raised," or "free-range." Some contain "omega-3." Hens are "vegetarian fed" or "grass fed." Then there's the color: Does it matter if eggs are brown or white?
Latest Flap on Egg Farms: Going Whole Hog on ‘Cage-Free’
Should egg-laying chickens roam free or live in roomy cages? That question is roiling the $9 billion U.S. egg industry as producers grapple with new state laws and food-company policies aimed at improving the well-being of the country’s 305 million egg-laying hens. The revised rules target the cramped cages that have dominated the industry for decades, enclosures that typically confine birds to 67 square inches each—smaller than a standard sheet of paper.
McDonald’s to curb purchases of chicken raised with antibiotics in U.S.
McDonald’s Corp. said its U.S. restaurants will stop selling chicken raised with antibiotics that are important to human health, one of the biggest moves yet by a major food company to address growing concerns over antibiotic-resistant “super bugs.” McDonald’s MCD, on Wednesday said it plans to make the changes over the next two years, working with its chicken suppliers, which include Tyson Foods Inc. TSN, the largest U.S. meatpacker.
McDonald’s to Curb Antibiotics in Chicken
McDonald’s Corp. MCD -2.10% plans to curtail antibiotics use in its U.S. chicken, a move that could help kick-start a broader food-industry response to growing public-health alarm around drug-resistant bacteria. The world’s largest restaurant chain said that over the next two years it would stop selling McNuggets and other chicken products in the U.S. made from birds raised with antibiotics that are important to human health.
Antibiotics and the Meat Industry – At A Glance
The FDA in late 2013 took one of its farthest-reaching actions to curb antibiotic use in the meat industry, although its recommendations were voluntary. The agency asked producers of veterinary medicines to revise labels to make it effectively illegal for farmers and ranchers to administer the drugs to hasten growth. The FDA says all 26 companies that make such drugs have agreed to phase them out by December 2016. The FDA policy faces criticism from some public-health advocates.
U.S. Farmers Scramble to Supply Latest Hot Crop: Sorghum
While many U.S. farmers grappled with lower grain prices last year, Mike Baker had an ace up his sleeve: sorghum. The grain, long overshadowed by more-plentiful crops, suddenly is in high demand thanks to China’s soaring appetite for animal feed and a shift in its buying preferences away from foreign corn. A 15-fold increase in imports of U.S. sorghum by China over the past year has pushed its price above corn’s in parts of the U.S.,...
Antibiotics and the Meat Industry
The FDA last December took one of its farthest-reaching actions to curb antibiotic use in the meat industry, although its recommendations were voluntary. The agency asked producers of veterinary medicines to revise labels to make it effectively illegal for farmers and ranchers to administer the drugs to hasten growth. The FDA says all 26 companies that make such drugs have agreed to phase them out by December 2016. The FDA policy faces criticism from some public-health advocates.
Meat Companies Go Antibiotics-Free as More Consumers Demand It
Meat Companies Go Antibiotics-Free as More Consumers Demand It Food Producers Increasingly Offer Chicken, Beef and Pork Raised Without Antibiotics, Responding to Consumer Concerns About Resistant Bacteria
EPA Approves New Dow Chemical Weed Killer
Dow Chemical Co. won approval from the U.S. Environmental Protection Agency for a new herbicide that may broaden farmers' weaponry to combat super weeds taking a toll on corn and other crops.
Tyson to Divest Sow-Purchasing Business to Clear Hillshire Deal
Tyson Foods Inc. agreed to divest its sow purchasing business to alleviate antitrust concerns about its impending $7.7 billion takeover of Hillshire Brands Co. under a settlement with the U.S. Department of Justice.
Craft Beer Makers Object to Ontario Retail System
TORONTO-Small brewers in Ontario are pushing for changes to one of the world's more unusual beer-selling environments. Known as the Beer Store, the retail network is partly a relic of provincial alcohol laws that date to the post-Prohibition era.
For Brazilian Beef Duo, a Swift Rise
Fueling Pilgrim's Pride Corp.'s sweetened, $6.8 billion bid for Hillshire Brands Co. this week is the outsize ambition of a pair of Brazilian brothers who aim to dominate the global meat business. A successful deal for the maker of Jimmy Dean sausages and Ball Park hot dogs would mark the boldest bet yet by Wesley and Joesley Batista, who run Pilgrim's majority owner, JBS SA.
An Appetite for Acquisitions
Food companies are hungry for deals. Food deals make up a big chunk of consumer mergers and acquisitions activity this year. Year to date, the value of global meat products mergers and acquisitions has increased by 80% to $14.9 billion, according to data provider Dealogic.
Brazilian Family Behind Bid for Hillshire Brands
Behind Pilgrim's Pride Corp.'s unsolicited takeover bid for Hillshire Brands Co. is a Brazilian family with a seemingly insatiable craving for meat-industry deals.
Brazil's JBS Carves Turnaround for Chicken Farm
ATHENS, Ga.-A system of rotating metal blades slicing into chicken legs at Pilgrim's Pride Corp.'s sprawling plant here helps illustrate why the company is carving out record profits four years after emerging from bankruptcy. Pilgrim's, acquired in late 2009 by Brazilian meatpacker JBS SA, spent $1.3 million on the automated machinery two years ago so it could cut dark meat into smaller portions in Athens.
Hummus Is Conquering America
CLOVER, Va.-Prodded by the largest U.S. hummus maker, farmers in the heart of tobacco country are trying to grow chickpeas, an improbable move that reflects booming demand for hummus. Sabra Dipping Co., a joint venture of PepsiCo Inc. and Israel's Strauss Group Ltd., wants to cultivate a commercial crop in Virginia to reduce its dependence on the legume's main U.S.
In China, Tyson Enters the Farming Business
Tyson is spending hundreds of millions of dollars to build its own farms in China instead of buying chickens from independent farmers, as the U.S. company does elsewhere. The effort is aimed at making inroads in a crucial growth market by addressing widespread concerns over food safety.
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